For houses, you have two options: buy or rent. What is right for one person may not be right for another, which is why it is important to know which option is best for your personal situation.
Why People Rent Homes?
There are many reasons why someone may choose or be forced to rent out, including sporadic or unpredictable income, high debt-to-income ratio, bankruptcy or foreclosure within the last six months, unpaid collection accounts or judgments , Often relocating employment or unable to save enough money to purchase the down payment required for the house.
As the homeowner, you will be responsible for any maintenance or repairs that occur. This is a big consideration when choosing whether to rent or buy. When you rent a house, the landlord is responsible for repairs, and the cost of these problems may not always be obvious.
How to know when to buy
If you have a stable income and a good employment experience, can provide at least a 5-10% down payment of the purchase price, and pay off all debts at the moment, then it may be time to consider buying a house instead of renting. In some cases, rental costs may even exceed typical mortgage payments.
When deciding to buy, job stability is a big factor. If your job does not require frequent relocation, and you plan to live at home for at least 5-10 years, you may want to consider purchasing. If you need to relocate later, you may have enough equity in the sale to be used as an advance payment for other houses.
Also Read: Cash Offer: Things You Need To Know
Home Buyer’s Checklist
- If you answered “yes” to the following questions, you may be ready to own a house. Your real estate agent can help you find the ideal home based on your personal needs.
- Have you worked steadily for at least one year, but preferably two years?
- Do you plan to live in the house long enough to establish equal assets?
- Can you provide a down payment and still have enough money to cover the closing costs, utilities and furnishings?
- Do you have all debts, including car loans, credit cards, etc.?
- Is owning a house important to you?
Renting VS Buying Illustration From First National Bank
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